The ubiquitous DVD kiosk company, which made its name by offering movie rentals for just $1 a night, has been testing higher prices in about two dozen markets around the country.
In an interview with the WSJ, Redbox President Mitch Lowe says that the company is renting DVDs in test markets for $1.50 or $2. Business is down, Lowe reports, but declines to say how much—or whether the price hikes will soon be spreading to a Redbox near you.
The number of Redbox kiosks has nearly doubled in the past year, from 11,800 to 20,600. But is the company getting too greedy for its own good? A $2 DVD is still cheaper than a typical Blockbuster store rental, but a little bit of the magical Redbox attraction is gone. (Redbox shouldn’t be comparing itself to Blockbuster’s dying business model anyway.) If Redbox doubles its prices, shoppers walking by a kiosk won’t be quite as likely to stop and browse for their evening’s entertainment. You won’t be able to justify the rental with the thought: Come on, it’s only a buck.
Upping the price to $2 also makes Redbox less of a bargain compared to Netflix or the public library, which undeniably has the best rental deal going: free.
Lowe himself gives a plug to the grand, free-for-everybody institution:
… you have peoples’ libraries. Almost everybody I know has bought almost all the kind of classics and all the things they’ve always wanted to own.